1. Field of the Invention
The present invention relates to business methods, and more particularly, to a system and method for reducing worker's compensation insurance reportable incidents.
2. Description of the Related Art
Costs associated with Worker's Compensation Insurance significantly impact employers in the United States, as well as globally. Workers Compensation Insurance premiums are a direct cost to the employer, yet, the direct costs of Workers Compensation often represent only 20 to 30 percent of the overall injury expenses. A basic understanding of what determines the direct cost of Workers Compensation insurance is described: Unlike other insurance, Workers Compensation functions like a credit line to finance the costs of injuries. As such, rates alone do not determine the overall cost. An Experience Modification Factor (Mod) tailors the cost of insurance to the individual loss performance of an employer. A Workers Compensation premium is calculated by this formula: Rate×$100 Payroll×Experience Modifier.
The Mod calculation is complex. But an employer generally is compared with similar employers in the same industry classification, and if past losses are lower than average, a credit rating reduces the premium. Conversely, if past losses are higher than average, a debit rating can actually increase costs in spite of lower rates.
Indirect costs, including overtime, temporary labor, increased training, supervisor time, production delays, unhappy customers, increased stress, and property or equipment damage represent several times the direct cost of the injury. A 2002 Safety Index report by Liberty Mutual tallied the direct cost of US workplace injuries at $40.1 billion. The total financial impact of both direct and indirect costs in the US was estimated to be as much as $240 billion.
Injury costs, both direct and indirect, will have a much greater impact on employers' overall costs than Worker's Compensation Insurance rate decreases.
The current method for management of Worker's Compensation Insurance Reportable Incident (employees' claims) cost by employers involves multiple industry, location specific systems such as: bill review, medical case management and employee involvement and activism, including employee choice of care provider, as examples, whose compliance, dependent on local management participation. These methods are mainly evaluated by financial costs after the occurrence of the loss, based on the revenue for the plant or specific employer location.
There is no known process that allows a combination of the pre-emptive sourcing of Worker's Compensation Reportable Incidents to be gathered by employers. A preemptive process would aide in managing and modifying processes to reduce the Reportable Incidents prior to their conversion to an actual occurrence cost, and allow employees to access educational methods for improving their individual wellness. This process would further identify propensity of compliance by the employee, so as to allow further evaluation by the employer of the statistical probability of a Worker's Compensation Source of Reportable Incident occurring. The present invention can do this easily and economically.
By using Internet technology to access the invention in a non-obvious and novel method, an increase in revenue, a reduction in cost or an avoidance of cost can result for the employer, which uses the invention. A higher probability of an improvement in the return of investment results for the employer, and, a higher probability exists for the employee to avoid occurrence of a reportable incident as the invention assists the employee in identification of methods that can source areas where their individual wellness may improve.